Chinese IPOs, China Zhongwang Holdings

IPOs are generally a scam perpetuated by the founders and their investment bank backers. The Chinese IPOs are hot steaming dumplings served with fillings of faeces to the public:

"Mainland aluminium producer China Zhongwang Holdings has instructed accounting firm Ernst & Young to independently review its initial public offering prospectus following allegations that the firm falsified information about its customer base in the share-offer document.

Zhongwang raised HK$9.8 billion in its May flotation, becoming the first company to obtain over US$1 billion from investors on any global stock market for nine months. The fund-raising propelled Liu Zhongtian , the Liaoning-based firm's founder and chairman, to 10th place on the Hurun rich list, which estimated his personal wealth at 28 billion yuan (HK$31.8 billion).

But on September 14, the mainland newspaper China Economic Observer claimed to have found that some customers named in Zhongwang's IPO prospectus did not buy from the company last year.
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But hold on!! We have the fox counting the chickens... the documentation will be in a suitably altered state. Nothing to see here. Move on.

"The aluminium firm yesterday told the Hong Kong stock exchange it had appointed a "big four" accountant "to conduct [an] independent review on the group's sales transactions with the major 10 customers during the period from 1 January 2008 to 30 June 2009 and documentations of income taxes for the financial year ended 31 December 2008".

People close to the company with knowledge of the matter confirmed the auditor was Ernst & Young. They said Zhongwang had not decided whether to make the findings public."